10-Q 1 aapl-20220625.htm 10-Q aapl-20220625
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 25, 2022
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             .
Commission File Number: 001-36743
aapl-20220625_g1.jpg
Apple Inc.
(Exact name of Registrant as specified in its charter)
California94-2404110
(State or other jurisdiction
of incorporation or organization)
(I.R.S. Employer Identification No.)
One Apple Park Way
Cupertino, California
95014
(Address of principal executive offices)(Zip Code)
(408) 996-1010
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading symbol(s)
Name of each exchange on which registered
Common Stock, $0.00001 par value per share
AAPL
The Nasdaq Stock Market LLC
1.000% Notes due 2022
The Nasdaq Stock Market LLC
1.375% Notes due 2024
The Nasdaq Stock Market LLC
0.000% Notes due 2025
The Nasdaq Stock Market LLC
0.875% Notes due 2025
The Nasdaq Stock Market LLC
1.625% Notes due 2026
The Nasdaq Stock Market LLC
2.000% Notes due 2027
The Nasdaq Stock Market LLC
1.375% Notes due 2029
The Nasdaq Stock Market LLC
3.050% Notes due 2029
The Nasdaq Stock Market LLC
0.500% Notes due 2031
The Nasdaq Stock Market LLC
3.600% Notes due 2042
The Nasdaq Stock Market LLC
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes       No  

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).
Yes       No  
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes       No  
16,070,752,000 shares of common stock were issued and outstanding as of July 15, 2022.



Apple Inc.

Form 10-Q
For the Fiscal Quarter Ended June 25, 2022
TABLE OF CONTENTS




PART I — FINANCIAL INFORMATION
Item 1.    Financial Statements
Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In millions, except number of shares which are reflected in thousands and per share amounts)

Three Months EndedNine Months Ended
June 25,
2022
June 26,
2021
June 25,
2022
June 26,
2021
Net sales:
   Products$63,355 $63,948 $245,241 $232,309 
   Services19,604 17,486 58,941 50,148 
Total net sales82,959 81,434 304,182 282,457 
Cost of sales:
   Products41,485 40,899 155,084 149,476 
   Services5,589 5,280 16,411 15,319 
Total cost of sales47,074 46,179 171,495 164,795 
Gross margin35,885 35,255 132,687 117,662 
Operating expenses:
Research and development6,797 5,717 19,490 16,142 
Selling, general and administrative6,012 5,412 18,654 16,357 
Total operating expenses12,809 11,129 38,144 32,499 
Operating income23,076 24,126 94,543 85,163 
Other income/(expense), net(10)243 (97)796 
Income before provision for income taxes23,066 24,369 94,446 85,959 
Provision for income taxes3,624 2,625 15,364 11,830 
Net income$19,442 $21,744 $79,082 $74,129 
Earnings per share:
Basic$1.20 $1.31 $4.86 $4.42 
Diluted$1.20 $1.30 $4.82 $4.38 
Shares used in computing earnings per share:
Basic16,162,945 16,629,371 16,277,824 16,772,656 
Diluted16,262,203 16,781,735 16,394,937 16,941,527 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q3 2022 Form 10-Q | 1


Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(In millions)

Three Months EndedNine Months Ended
June 25,
2022
June 26,
2021
June 25,
2022
June 26,
2021
Net income
$19,442 $21,744 $79,082 $74,129 
Other comprehensive income/(loss):
Change in foreign currency translation, net of tax
(721)188 (1,102)659 
Change in unrealized gains/losses on derivative instruments, net of tax:
Change in fair value of derivative instruments852 (24)1,548 4 
Adjustment for net (gains)/losses realized and included in net income
121 17 (87)593 
Total change in unrealized gains/losses on derivative instruments
973 (7)1,461 597 
Change in unrealized gains/losses on marketable debt securities, net of tax:
Change in fair value of marketable debt securities
(3,150)217 (9,959)(558)
Adjustment for net (gains)/losses realized and included in net income
95 (54)140 (234)
Total change in unrealized gains/losses on marketable debt securities
(3,055)163 (9,819)(792)
Total other comprehensive income/(loss)(2,803)344 (9,460)464 
Total comprehensive income$16,639 $22,088 $69,622 $74,593 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q3 2022 Form 10-Q | 2


Apple Inc.
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In millions, except number of shares which are reflected in thousands and par value)

June 25,
2022
September 25,
2021
ASSETS:
Current assets:
Cash and cash equivalents$27,502 $34,940 
Marketable securities20,729 27,699 
Accounts receivable, net21,803 26,278 
Inventories5,433 6,580 
Vendor non-trade receivables20,439 25,228 
Other current assets16,386 14,111 
Total current assets112,292 134,836 
Non-current assets:
Marketable securities131,077 127,877 
Property, plant and equipment, net40,335 39,440 
Other non-current assets52,605 48,849 
Total non-current assets
224,017 216,166 
Total assets
$336,309 $351,002 
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Current liabilities:
Accounts payable$48,343 $54,763 
Other current liabilities48,811 47,493 
Deferred revenue7,728 7,612 
Commercial paper10,982 6,000 
Term debt14,009 9,613 
Total current liabilities129,873 125,481 
Non-current liabilities:
Term debt
94,700 109,106 
Other non-current liabilities
53,629 53,325 
Total non-current liabilities
148,329 162,431 
Total liabilities
278,202 287,912 
Commitments and contingencies
Shareholders’ equity:
Common stock and additional paid-in capital, $0.00001 par value: 50,400,000 shares authorized; 16,095,378 and 16,426,786 shares issued and outstanding, respectively
62,115 57,365 
Retained earnings5,289 5,562 
Accumulated other comprehensive income/(loss)(9,297)163 
Total shareholders’ equity58,107 63,090 
Total liabilities and shareholders’ equity$336,309 $351,002 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q3 2022 Form 10-Q | 3


Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)
(In millions, except per share amounts)

Three Months EndedNine Months Ended
June 25,
2022
June 26,
2021
June 25,
2022
June 26,
2021
Total shareholders’ equity, beginning balances$67,399 $69,178 $63,090 $65,339 
Common stock and additional paid-in capital:
Beginning balances61,181 54,203 57,365 50,779 
Common stock issued
  593 561 
Common stock withheld related to net share settlement of equity awards
(1,371)(1,224)(2,783)(2,460)
Share-based compensation2,305 2,010 6,940 6,109 
Ending balances62,115 54,989 62,115 54,989 
Retained earnings:
Beginning balances12,712 15,261 5,562 14,966 
Net income19,442 21,744 79,082 74,129 
Dividends and dividend equivalents declared(3,760)(3,713)(11,058)(10,755)
Common stock withheld related to net share settlement of equity awards
(1,403)(1,559)(3,323)(3,606)
Common stock repurchased(21,702)(22,500)(64,974)(65,501)
Ending balances5,289 9,233 5,289 9,233 
Accumulated other comprehensive income/(loss):
Beginning balances(6,494)(286)163 (406)
Other comprehensive income/(loss)(2,803)344 (9,460)464 
Ending balances(9,297)58 (9,297)58 
Total shareholders’ equity, ending balances$58,107 $64,280 $58,107 $64,280 
Dividends and dividend equivalents declared per share or RSU$0.23 $0.22 $0.67 $0.63 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q3 2022 Form 10-Q | 4


Apple Inc.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In millions)

Nine Months Ended
June 25,
2022
June 26,
2021
Cash, cash equivalents and restricted cash, beginning balances$35,929 $39,789 
Operating activities:
Net income79,082 74,129 
Adjustments to reconcile net income to cash generated by operating activities:
Depreciation and amortization8,239 8,295 
Share-based compensation expense6,760 5,961 
Deferred income tax expense/(benefit)2,756 (737)
Other(61)(689)
Changes in operating assets and liabilities:
Accounts receivable, net4,561 (1,316)
Inventories1,049 (1,213)
Vendor non-trade receivables4,789 4,892 
Other current and non-current assets(3,289)(5,899)
Accounts payable(6,108)(1,786)
Deferred revenue260 1,738 
Other current and non-current liabilities(14)463 
Cash generated by operating activities98,024 83,838 
Investing activities:
Purchases of marketable securities(70,178)(94,052)
Proceeds from maturities of marketable securities24,203 49,880 
Proceeds from sales of marketable securities33,609 36,745 
Payments for acquisition of property, plant and equipment(7,419)(7,862)
Payments made in connection with business acquisitions, net(169)(13)
Other(1,183)(78)
Cash used in investing activities(21,137)(15,380)
Financing activities:
Payments for taxes related to net share settlement of equity awards(5,915)(5,855)
Payments for dividends and dividend equivalents(11,138)(10,827)
Repurchases of common stock(64,974)(66,223)
Proceeds from issuance of term debt, net 13,923 
Repayments of term debt(6,750)(7,500)
Proceeds from commercial paper, net4,970 3,022 
Other(148)489 
Cash used in financing activities(83,955)(72,971)
Decrease in cash, cash equivalents and restricted cash(7,068)(4,513)
Cash, cash equivalents and restricted cash, ending balances$28,861 $35,276 
Supplemental cash flow disclosure:
Cash paid for income taxes, net$12,251 $18,536 
Cash paid for interest$1,910 $1,870 
See accompanying Notes to Condensed Consolidated Financial Statements.
Apple Inc. | Q3 2022 Form 10-Q | 5


Apple Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)
Note 1 – Summary of Significant Accounting Policies
Basis of Presentation and Preparation
The condensed consolidated financial statements include the accounts of Apple Inc. and its wholly owned subsidiaries (collectively “Apple” or the “Company”). Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the condensed consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. The preparation of these condensed consolidated financial statements and accompanying notes in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported. Actual results could differ materially from those estimates. Certain prior period amounts in the condensed consolidated financial statements and accompanying notes have been reclassified to conform to the current period’s presentation. These condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual consolidated financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended September 25, 2021.
The Company’s fiscal year is the 52- or 53-week period that ends on the last Saturday of September. An additional week is included in the first fiscal quarter every five or six years to realign the Company’s fiscal quarters with calendar quarters. The Company’s fiscal years 2022 and 2021 span 52 weeks each. Unless otherwise stated, references to particular years, quarters, months and periods refer to the Company’s fiscal years ended in September and the associated quarters, months and periods of those fiscal years.
Earnings Per Share
The following table shows the computation of basic and diluted earnings per share for the three- and nine-month periods ended June 25, 2022 and June 26, 2021 (net income in millions and shares in thousands):
Three Months EndedNine Months Ended
June 25,
2022
June 26,
2021
June 25,
2022
June 26,
2021
Numerator:
Net income$19,442 $21,744 $79,082 $74,129 
Denominator:
Weighted-average basic shares outstanding16,162,945 16,629,371 16,277,824 16,772,656 
Effect of dilutive securities99,258 152,364 117,113 168,871 
Weighted-average diluted shares16,262,203 16,781,735 16,394,937 16,941,527 
Basic earnings per share$1.20 $1.31 $4.86 $4.42 
Diluted earnings per share$1.20 $1.30 $4.82 $4.38 
Apple Inc. | Q3 2022 Form 10-Q | 6


Note 2 – Revenue
Net sales disaggregated by significant products and services for the three- and nine-month periods ended June 25, 2022 and June 26, 2021 were as follows (in millions):
Three Months EndedNine Months Ended
June 25,
2022
June 26,
2021
June 25,
2022
June 26,
2021
iPhone® (1)
$40,665 $39,570 $162,863 $153,105 
Mac® (1)
7,382 8,235 28,669 26,012 
iPad® (1)
7,224 7,368 22,118 23,610 
Wearables, Home and Accessories (1)(2)
8,084 8,775 31,591 29,582 
Services (3)
19,604 17,486 58,941 50,148 
Total net sales (4)
$82,959 $81,434 $304,182 $282,457 
(1)Products net sales include amortization of the deferred value of unspecified software upgrade rights, which are bundled in the sales price of the respective product.
(2)Wearables, Home and Accessories net sales include sales of AirPods®, Apple TV®, Apple Watch®, Beats® products, HomePod mini® and accessories.
(3)Services net sales include sales from the Company’s advertising, AppleCare®, cloud, digital content, payment and other services. Services net sales also include amortization of the deferred value of services bundled in the sales price of certain products.
(4)Includes $3.1 billion of revenue recognized in the three months ended June 25, 2022 that was included in deferred revenue as of March 26, 2022, $3.0 billion of revenue recognized in the three months ended June 26, 2021 that was included in deferred revenue as of March 27, 2021, $6.3 billion of revenue recognized in the nine months ended June 25, 2022 that was included in deferred revenue as of September 25, 2021, and $5.5 billion of revenue recognized in the nine months ended June 26, 2021 that was included in deferred revenue as of September 26, 2020.
The Company’s proportion of net sales by disaggregated revenue source was generally consistent for each reportable segment in Note 9, “Segment Information and Geographic Data” for the three- and nine-month periods ended June 25, 2022 and June 26, 2021, except in Greater China, where iPhone revenue represented a moderately higher proportion of net sales.
As of June 25, 2022 and September 25, 2021, the Company had total deferred revenue of $12.2 billion and $11.9 billion, respectively. As of June 25, 2022, the Company expects 63% of total deferred revenue to be realized in less than a year, 27% within one-to-two years, 8% within two-to-three years and 2% in greater than three years.
Apple Inc. | Q3 2022 Form 10-Q | 7


Note 3 – Financial Instruments
Cash, Cash Equivalents and Marketable Securities
The following tables show the Company’s cash, cash equivalents and marketable securities by significant investment category as of June 25, 2022 and September 25, 2021 (in millions):
June 25, 2022
Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash and
Cash
Equivalents
Current
Marketable
Securities
Non-Current
Marketable
Securities
Cash$12,852 $— $— $12,852 $12,852 $ $ 
Level 1 (1):
Money market funds10,970   10,970 10,970   
Mutual funds252  (32)220  220  
Subtotal11,222  (32)11,190 10,970 220  
Level 2 (2):
U.S. Treasury securities25,296  (1,328)23,968 91 3,511 20,366 
U.S. agency securities5,805  (511)5,294 4 240 5,050 
Non-U.S. government securities17,597 6 (1,023)16,580  6,336 10,244 
Certificates of deposit and time deposits
3,928   3,928 3,374 504 50 
Commercial paper966   966 209 757  
Corporate debt securities88,912 15 (6,455)82,472 2 8,738 73,732 
Municipal securities978  (26)952  203 749 
Mortgage- and asset-backed securities
23,058  (1,952)21,106  220 20,886 
Subtotal166,540 21 (11,295)155,266 3,680 20,509 131,077 
Total (3)
$190,614 $21 $(11,327)$179,308 $27,502 $20,729 $131,077 
September 25, 2021
Adjusted
Cost
Unrealized
Gains
Unrealized
Losses
Fair
Value
Cash and
Cash
Equivalents
Current
Marketable
Securities
Non-Current
Marketable
Securities
Cash$17,305 $— $— $17,305 $17,305 $ $ 
Level 1 (1):
Money market funds9,608   9,608 9,608   
Mutual funds175 11 (1)185  185  
Subtotal9,783 11 (1)9,793 9,608 185  
Level 2 (2):
Equity securities1,527  (564)963  963  
U.S. Treasury securities22,878 102 (77)22,903 3,596 6,625 12,682 
U.S. agency securities8,949 2 (64)8,887 1,775 1,930 5,182 
Non-U.S. government securities20,201 211 (101)20,311 390 3,091 16,830 
Certificates of deposit and time deposits
1,300   1,300 490 810  
Commercial paper2,639   2,639 1,776 863  
Corporate debt securities83,883 1,242 (267)84,858  12,327 72,531 
Municipal securities967 14  981  130 851 
Mortgage- and asset-backed securities
20,529 171 (124)20,576  775 19,801 
Subtotal162,873 1,742 (1,197)163,418 8,027 27,514 127,877 
Total (3)
$189,961 $1,753 $(1,198)$190,516 $34,940 $27,699 $127,877 
(1)Level 1 fair value estimates are based on quoted prices in active markets for identical assets or liabilities.
(2)Level 2 fair value estimates are based on observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
(3)As of June 25, 2022 and September 25, 2021, total marketable securities included $14.1 billion and $17.9 billion, respectively, that were restricted from general use, related to the European Commission decision finding that Ireland granted state aid to the Company, and other agreements.
Apple Inc. | Q3 2022 Form 10-Q | 8


The following table shows the fair value of the Company’s non-current marketable debt securities, by contractual maturity, as of June 25, 2022 (in millions):
Due after 1 year through 5 years$92,970 
Due after 5 years through 10 years19,317 
Due after 10 years18,790 
Total fair value$131,077 
Derivative Instruments and Hedging
The Company may use derivative instruments to partially offset its business exposure to foreign exchange and interest rate risk. However, the Company may choose not to hedge certain exposures for a variety of reasons, including accounting considerations or the prohibitive economic cost of hedging particular exposures. There can be no assurance the hedges will offset more than a portion of the financial impact resulting from movements in foreign exchange or interest rates.
Foreign Exchange Risk
To protect gross margins from fluctuations in foreign currency exchange rates, the Company may enter into forward contracts, option contracts or other instruments, and may designate these instruments as cash flow hedges. The Company generally hedges portions of its forecasted foreign currency exposure associated with revenue and inventory purchases, typically for up to 12 months.
To protect the Company’s foreign currency–denominated term debt or marketable securities from fluctuations in foreign currency exchange rates, the Company may enter into forward contracts, cross-currency swaps or other instruments. The Company designates these instruments as either cash flow or fair value hedges. As of June 25, 2022, the Company’s hedged term debt– and marketable securities–related foreign currency transactions are expected to be recognized within 20 years.
The Company may also enter into derivative instruments that are not designated as accounting hedges to protect gross margins from certain fluctuations in foreign currency exchange rates, as well as to offset a portion of the foreign currency exchange gains and losses generated by the remeasurement of certain assets and liabilities denominated in non-functional currencies.
Interest Rate Risk
To protect the Company’s term debt or marketable securities from fluctuations in interest rates, the Company may enter into interest rate swaps, options or other instruments. The Company designates these instruments as either cash flow or fair value hedges.
The notional amounts of the Company’s outstanding derivative instruments as of June 25, 2022 and September 25, 2021 were as follows (in millions):
June 25,
2022
September 25,
2021
Derivative instruments designated as accounting hedges:
Foreign exchange contracts$76,234 $76,475 
Interest rate contracts$20,775 $16,875 
Derivative instruments not designated as accounting hedges:
Foreign exchange contracts$84,506 $126,918 
The gross fair values of the Company’s derivative assets and liabilities were not material as of June 25, 2022 and September 25, 2021.
The gains and losses recognized in other comprehensive income/(loss) and amounts reclassified from accumulated other comprehensive income/(loss) to net income for the Company’s derivative instruments designated as cash flow hedges were not material in the three- and nine-month periods ended June 25, 2022 and June 26, 2021.
Apple Inc. | Q3 2022 Form 10-Q | 9


The carrying amounts of the Company’s hedged items in fair value hedges as of June 25, 2022 and September 25, 2021 were as follows (in millions):
June 25,
2022
September 25,
2021
Hedged assets/(liabilities):
Current and non-current marketable securities$14,250 $15,954 
Current and non-current term debt$(19,281)$(17,857)
The gains and losses on the Company’s derivative instruments designated as fair value hedges and the related hedged item adjustments were not material in the three- and nine-month periods ended June 25, 2022 and June 26, 2021.
Accounts Receivable
Trade Receivables
The Company has considerable trade receivables outstanding with its third-party cellular network carriers, wholesalers, retailers, resellers, small and mid-sized businesses and education, enterprise and government customers. The Company generally does not require collateral from its customers; however, the Company will require collateral or third-party credit support in certain instances to limit credit risk. In addition, when possible, the Company attempts to limit credit risk on trade receivables with credit insurance for certain customers or by requiring third-party financing, loans or leases to support credit exposure. These credit-financing arrangements are directly between the third-party financing company and the end customer. As such, the Company generally does not assume any recourse or credit risk sharing related to any of these arrangements.
The Company’s cellular network carriers accounted for 36% and 42% of total trade receivables as of June 25, 2022 and September 25, 2021, respectively.
Vendor Non-Trade Receivables
The Company has non-trade receivables from certain of its manufacturing vendors resulting from the sale of components to these vendors who manufacture subassemblies or assemble final products for the Company. The Company purchases these components directly from suppliers. As of June 25, 2022, the Company had two vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 54% and 12%. As of September 25, 2021, the Company had three vendors that individually represented 10% or more of total vendor non-trade receivables, which accounted for 52%, 11% and 11%.
Note 4 – Condensed Consolidated Financial Statement Details
The following tables show the Company’s condensed consolidated financial statement details as of June 25, 2022 and September 25, 2021 (in millions):
Property, Plant and Equipment, Net
June 25,
2022
September 25,
2021
Gross property, plant and equipment$111,851 $109,723 
Accumulated depreciation and amortization(71,516)(70,283)
Total property, plant and equipment, net$40,335 $39,440 
Other Non-Current Liabilities
June 25,
2022
September 25,
2021
Long-term taxes payable$20,699 $24,689 
Other non-current liabilities32,930 28,636 
Total other non-current liabilities$53,629 $53,325 
Apple Inc. | Q3 2022 Form 10-Q | 10


Other Income/(Expense), Net
The following table shows the detail of other income/(expense), net for the three- and nine-month periods ended June 25, 2022 and June 26, 2021 (in millions):
Three Months EndedNine Months Ended
June 25,
2022
June 26,
2021
June 25,
2022
June 26,
2021
Interest and dividend income$722 $719 $2,072 $2,184 
Interest expense(719)(665)(2,104)(1,973)
Other income/(expense), net(13)189 (65)585 
Total other income/(expense), net$(10)$243 $(97)$796 
Note 5 – Debt
Commercial Paper
The Company issues unsecured short-term promissory notes (“Commercial Paper”) pursuant to a commercial paper program. The Company uses net proceeds from the commercial paper program for general corporate purposes, including dividends and share repurchases. As of June 25, 2022 and September 25, 2021, the Company had $11.0 billion and $6.0 billion of Commercial Paper outstanding, respectively. The following table provides a summary of cash flows associated with the issuance and maturities of Commercial Paper for the nine months ended June 25, 2022 and June 26, 2021 (in millions):
Nine Months Ended
June 25,
2022
June 26,
2021
Maturities 90 days or less:
Proceeds from commercial paper, net$4,383 $2,745 
Maturities greater than 90 days:
Proceeds from commercial paper5,731 3,993 
Repayments of commercial paper(5,144)(3,716)
Proceeds from commercial paper, net587 277 
Total proceeds from commercial paper, net$4,970 $3,022 
Term Debt
As of June 25, 2022 and September 25, 2021, the Company had outstanding floating- and fixed-rate notes with varying maturities for an aggregate carrying amount of $108.7 billion and $118.7 billion, respectively (collectively the “Notes”). As of June 25, 2022 and September 25, 2021, the fair value of the Company’s Notes, based on Level 2 inputs, was $101.0 billion and $125.3 billion, respectively.
Note 6 – Shareholders’ Equity
Share Repurchase Program
During the nine months ended June 25, 2022, the Company repurchased 408 million shares of its common stock for $65.0 billion under a share repurchase program authorized by the Board of Directors (the “Program”), including 35 million shares delivered under accelerated share repurchase agreements totaling $6.0 billion that were entered into in November 2021. The Program does not obligate the Company to acquire a minimum amount of shares. Under the Program, shares may be repurchased in privately negotiated and/or open market transactions, including under plans complying with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended.
Apple Inc. | Q3 2022 Form 10-Q | 11


Note 7 – Benefit Plans
Restricted Stock Units
A summary of the Company’s restricted stock unit (“RSU”) activity and related information for the nine months ended June 25, 2022 is as follows:
Number of
RSUs
(in thousands)
Weighted-Average
Grant Date Fair
Value Per RSU
Aggregate
Fair Value
(in millions)
Balance as of September 25, 2021240,427 $75.16 
RSUs granted84,927 $150.02 
RSUs vested(109,846)$70.96 
RSUs canceled(12,986)$98.26 
Balance as of June 25, 2022202,522 $107.35 $28,689 
The fair value as of the respective vesting dates of RSUs was $7.8 billion and $17.3 billion for the three- and nine-month periods ended June 25, 2022, respectively, and was $7.9 billion and $17.3 billion for the three- and nine-month periods ended June 26, 2021, respectively.
Share-Based Compensation
The following table shows share-based compensation expense and the related income tax benefit included in the Condensed Consolidated Statements of Operations for the three- and nine-month periods ended June 25, 2022 and June 26, 2021 (in millions):
Three Months EndedNine Months Ended
June 25,
2022
June 26,
2021
June 25,
2022
June 26,
2021
Share-based compensation expense$2,243 $1,960 $6,760 $5,961 
Income tax benefit related to share-based compensation expense$(1,231)$(1,319)$(3,416)$(3,518)
As of June 25, 2022, the total unrecognized compensation cost related to outstanding RSUs and stock options was $18.1 billion, which the Company expects to recognize over a weighted-average period of 2.7 years.
Note 8 – Commitments and Contingencies
Accrued Warranty
The following table shows changes in the Company’s accrued warranties and related costs for the three- and nine-month periods ended June 25, 2022 and June 26, 2021 (in millions):
Three Months EndedNine Months Ended
June 25,
2022
June 26,
2021
June 25,
2022
June 26,
2021
Beginning accrued warranty and related costs$3,206 $3,784 $3,364 $3,354 
Cost of warranty claims(534)(636)(1,787)(2,008)
Accruals for product warranty177 384 1,272 2,186 
Ending accrued warranty and related costs$2,849 $3,532 $2,849 $3,532 
Contingencies
The Company is subject to various legal proceedings and claims that have arisen in the ordinary course of business and that have not been fully resolved. The outcome of litigation is inherently uncertain. In the opinion of management, there was not at least a reasonable possibility the Company may have incurred a material loss, or a material loss greater than a recorded accrual, concerning loss contingencies for asserted legal and other claims.
Apple Inc. | Q3 2022 Form 10-Q | 12


Note 9 – Segment Information and Geographic Data
The following table shows information by reportable segment for the three- and nine-month periods ended June 25, 2022 and June 26, 2021 (in millions):
Three Months EndedNine Months Ended
June 25,
2022